Mr. Mortgage…

I like Lou Barnes and find his perspective and advice, usually on the money.

“This episode is nothing — nothing — compared to October ’79, when over one long weekend Paul Volcker announced that the cost of money would float free with demand. Many mortgage bankers never answered their phones again. Mortgage rates went from 10% to 11.5% over that weekend, and to 13% by Christmas. The technical top was 18.1% in 1981, but that was statistical artifact: lights-on-but-dead S&Ls priced money just beyond demand. There wasn’t any mortgage money, except the first of the new-fangled adjustables, start rate a-hell-of-a-deal 16%. ”